2009 4th Quarter Report
IKONICS REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
DULUTH, MN – IKONICS Corporation (NASDAQ:IKNX), a Duluth based imaging technology company, reported sales for 2009 of $15,122,000, a 4.6% decrease compared to 2008. Income from operations declined by 10% for the year to $870,000. Cash provided by operations grew by 22% to $1,374,000 over 2008. Reported income for the year was adversely affected by the $919,000 write off of the Company’s investment in Imaging Technology International (iTi). After the write off, the loss for the year was $307,000 or $0.16 per share compared to income of $814,000 or $0.40 per share for 2008. The iTi write off was a non-cash event, and cash and cash equivalents grew by 45% during the year to $1,305,000.
Sales for the fourth quarter declined by 1.5% to $3,851,000, while earnings increased by 80% to $202,000 or $0.10 per share.
Bill Ulland, IKONICS CEO said, “Between the recession and the iTi failure, 2009 was a turbulent year for the Company. However, we remain financially very strong with no long term debt and a very healthy balance sheet. We made progress during the year on our new initiatives; we have now placed a digital texturing printer at a beta site where it is operating above expectation and is generating ongoing sales for us in ink jet fluids and substrates. We have found a replacement supplier for the digital texturing printer that is a much stronger and more experienced manufacturer. Recoveries in the aerospace and electronics industries are helping our other new initiatives. Our screen-print stencil business remains steady while the awards and recognition sector continues to be soft. On balance, I believe 2010 will be a good year for IKONICS, and that we have come out of 2009 a better company and a stronger competitor in our various markets.”
IKONICS Corporation
CONDENSED STATEMENTS OF OPERATIONS
For the Three Months and Twelve Months Ended December 31, 2009 and 2008
Three Months Ended Twelve Months Ended
12/31/09 12/31/08 12/31/09 12/31/08
Net sales $3,851,241 $3,910,794 $ 15,121,617 $15,854,484
Cost of goods sold 2,229,117 2,429,329 9,054,771 9,228,187
Gross profit 1,622,124 1,481,465 6,066,846 6,626,297
Operating expenses 1,290,223 1,344,302 5,197,195 5,655,925
Income from operations 331,901 137,163 869,651 970,372
Gain on sale of investment – – 29,762 24,550
Loss on investment – – (918,951) –
Interest income 2,988 2,950 8,178 90,212
Income (loss) before income taxes 334,889 140,113 (11,360) 1,085,134
Income tax expense 132,747 27,887 296,000 271,000
Net income (loss) $ 202,142 $ 112,226 $ (307,360) $ 814,134
Earnings (loss) per common share-diluted $ 0.10 $ 0.06 $ (0.16) $ 0.40
Average shares outstanding-diluted 1,969,420 2,005,053 1,973,739 2,053,733
CONDENSED BALANCE SHEETS
As of December 31, 2009 and 2008
12/31/09 12/31/08
Assets
Current assets $ 6,417,488 $ 5,562,130
Property, plant and equipment, net 5,234,244 5,602,063
Investment in non-marketable
equity securities – 918,951
Intangible assets 345,540 403,285
$11,997,272 $12,486,429
Liabilities and Stockholders’ Equity
Current liabilities $ 809,186 $ 909,789
Deferred income taxes 162,000 143,000
Long term debt – –
Stockholders’ equity 11,026,086 11,433,640
$11,997,272 $12,486,429
CONDENSED STATEMENTS OF CASH FLOW
For the Twelve Months Ended December 31, 2009 and 2008
12/31/09 12/31/08
Net cash provided by operating activities $1,374,112 $1,125,668
Net cash used in investing activities (847,420) (1,003,504)
Net cash used in financing activities (123,844) (450,446)
Net increase (decrease) in cash 402,848 (328,282)
Cash at beginning of period 901,738 1,230,020
Cash at end of period $1,304,586 $ 901,738